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Archive for December, 2013

Goose Island – 18+ months later

Posted by beer_chris on 26-December-2013

In April 2012 the Brazilian-based AB-Inbev global brewing conglomerate bought Goose Island Brewery for ~$40M. The craft beer community immediately freaked out about it. The majority opinion was that the Goose Island we knew and loved was no more – that AB-InBev was planning a SABMiller Celis-style acquisition and digestion, or that the beloved Chicago-based regional craft brewer would just become another brand in the ‘crafty’ big brewer’s portfolio, taking a place alongside Shock Top, American Ale and other craft beer similes.

I’ll admit, I was part of the doom and gloom naysayers in those early days. AB-Inbev (even before InBev’s acquisition of Anheuser-Busch) had not shown a penchant for even understanding ‘craft’ beer, much less taking over the operation of one of the hallmark breweries of the American craft beer renaissance. Back in the late 2000’s AB  had been associated with Goose Island through the Craft Brewers Alliance, a cooperative organization of GI with AB and other American craft brewers to share production and distribution of their beers and expand their reach. The scuttlebutt on the CBA was that it provided the participating breweries with much needed capital for expansion as well as a regional network of breweries to ‘contract’ production. Most importantly, AB was the exclusive partner for coordinating distribution – providing the CBA member brewers with access to the national network of AB-exclusive distributors.

Goose Island’s participation in this venture was not the same as its fellow craft brewers. Unlike Kona, Red Hook and Widmer Brothers, Goose Island beer didn’t start appearing on supermarket shelves or on tap walls previously dominated by Bud and Bud Light, certainly not here in Texas. As I understand it Goose Island did contract for some of it’s beers and made some of the beers for the other participants, but (with some exception) maintained a regional Chicago and Midwest area focus with its business.

Regardless of the details of the venture with the CBA, the main differentiator between Goose Island and the other partners was their reputation with craft beer consumers (including me) for quality. The original brewpub on Clybourn in Lincoln Park was well known nationally for inventive and tasty products. The specialty Belgian-style beers and Bourbon County Stout especially were well respected and just darn good. The normal lineup of English-style ales (pale ale, IPA and brown) were quite tasty and a rarity in the US craft beer market so focused on bold American styles. 312 – their so-called ‘urban wheat ale’ was nothing special taste-wise but a nice play to dislodge Bells Oberon from the hands of Chicagoans just getting into ‘craft’ beer.

The rumors behind the sale were varied. Most centered around issues of capacity and expansion – that the pressures from the explosion in the US craft beer market coupled with the growth of the CBA nationally were simply too much for Goose Island to grow into without help from a deep-pocketed partner. The bottom line seemed to be that Goose Island had simply grown as big as it could have as a regional brewer, and to make that next step to a national brand needed to go ‘all-in’ with a contract partner like CBA or find a buyer outright. There were inevitable rumors of a pure sellout – that the owners (John Hall were just looking for a payday, but the press releases and spin from all sides focused on the clear talking points – more capacity, AB is leaving GI alone. However, coupled with rumors that ABInbev was buying trademarks across the country for ‘Urban Wheat Ales’ named after local area codes and the craft beer community was twisted into knots. Much tearing at hair and gouging at eyes commenced, with many pronouncing the death of a beloved pioneer of American craft brewing.

So, 18 months later what actually came to pass? From a Texan perspective, my opinion is that the merger has been a ‘good’ thing for craft beer consumers and that most of the public committments that were made have been kept. Goose Island beers are more widely available across the country than they ever have been. The Belgian series – Sofie, Matilda, Juliet, Pepe Nero, Pere Jacques – started appearing nearly everywhere in the Houston area, on tap and in stores. Honkers Ale, 312 and IPA started showing up as well. Texas and Houston got the first distribution of Bourbon County Stout and the first allocations of other rarities.

On the negative side, I find Honkers, IPA and 312 to be shadows of the versions I’ve had over the years on visits to Chicago. This could be changes in my own palate, some amount of displacement of negative feelings for ABInBev sneaking in or a mixture of all of that, but I don’t like them and I don’t buy them. To ABInBev’s credit they changed the labels for the standards to indicate the brewery where they are made and packaged – the 312 we get in Houston is coming from the AB brewery in Fort Collins and Honkers from upstate New York (Baldwinsville). We also haven’t seen an explosion of light wheat ales named after area codes, but who knows what may be next.

I’ll pick a nit with the local AB distributor as well – Silver Eagle Brands – for although they seem to have learned a great deal about craft beer in the last 5 years and specifically are doing a much better job with allocations of rarities and special beers like Bourbon County Stout, my local HEB and Kroger seem to always have cases of Sofie and Matilda stacked on a (non-refrigerated) end cap. I’ve seen basically zero marketing for the any of the beers, and I worry that treating these pretty great Belgian-style beers like cases of Bud Light is eroding what little brand value they might have with the ‘normal’ consumer – but again I’m picking a nit here. There have also been a few ‘tap takeovers’ that failed because of a lack of understanding of the products, a basic fail in coordination or in the cases I’m aware of, both. The guys at Silver Eagle seem to finally understand what they have with their craft portfolio, but making the transition from slinging cases off trucks to placing special products and working the unique marketing of those products remains a challenge. Goose Island still isn’t positioned to sell in Houston, and that bothers me.

All in all, picking nits with the handling of marketing is not the conclusion to this post – the conclusion is that the ABInBev purchase has been a radically good thing, so far, especially for the consumer. I can now buy Goose Island beers I enjoy basically at my leisure wherever I want. Rarities like Bourbon County are harder to get but don’t involve a plane ticket or a UPS box filled with beers for trade. These are good things, and I’ll even say that this purchase could be seen as a model for how the big boys can get into the US (and global) craft market effectively.


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